Micron Know-how (MU) shares might stay in give attention to Tuesday after main a broad chip rally to start the week amid optimism that sturdy artificial intelligence (AI) demand will proceed to drive sector development this yr.

The transfer Monday got here after contract electronics producer Foxconn posted document fourth-quarter income pushed by booming demand for AI servers, whereas Microsoft (MSFT) not too long ago introduced plans to invest $80 billion in information facilities in fiscal 2025 to energy AI know-how. 

Micron, a producer of reminiscence chips, stands properly positioned to learn from surging AI infrastructure demand as its silicon is used within the newest AI processors from chipmaking giants similar to Nvidia (NVDA) and Superior Micro Gadgets (AMD).

Micron shares jumped 10.5% on Monday to shut at $99.26. In simply three buying and selling classes this yr, the inventory has gained 18%, handily outpacing the iShares Semiconductor ETF’s (SOXX) 6% return over the identical interval.

Under, we take a better have a look at Micron’s chart and use technical analysis to determine worth ranges value watching.

Inventory Rallies From Key Help Space

Since bottoming out in early August, Micron shares have remained rangebound, serving to to determine simply identifiable support and resistance ranges on the chart.

Extra not too long ago, the inventory gapped decrease in mid-December, however instantly discovered shopping for curiosity close to the August and September swing lows. Importantly, Monday’s rally from this key assist space occurred on the very best trading volume since mid-December, indicating shopping for conviction behind the transfer.

Let’s determine a number of key overhead areas that might come into play if the inventory continues its upward momentum and likewise level out a few essential assist ranges that will entice assist throughout dips.

Key Overhead Areas to Watch

Comply with-through shopping for might see the shares transfer as much as the $110 stage, a location the place they might run into overhead resistance close to the 200-day moving average and a trendline that hyperlinks a number of peaks and troughs on the chart between March and December.

A extra bullish advance might gasoline a rally to the $130 stage. Buyers might search for exit points on this space close to the April peak, which additionally sits alongside a spread of comparable costs on the chart from Could to July.

Vital Help Ranges to Monitor

Throughout retracements, traders ought to initially monitor if Micron bulls can defend the $97 stage. This space, at present sitting simply 2% under Monday’s closing worth, might encounter assist close to a horizontal line that connects a spread of comparable price action on the chart relationship again to early March.

Lastly, a breakdown under this stage might see the shares revisit decrease assist round $85. Buyers might look to accumulate inventory on this area close to final month’s low, which aligns with the distinguished August and September troughs.

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As of the date this text was written, the creator doesn’t personal any of the above securities.